The role of the national consumer tribunal in reckless lending in terms of the National Credit Act 34 of 2005

Abstract

The National Credit Act 34 of 2005 (NCA) prohibits the granting of reckless credit and identifies three types of reckless credit for which civil remedies may be granted in terms of section 83 of the Act. It also introduced mandatory pre-agreement assessment in terms of section 81(2) of the NCA read with the 2015 Financial Affordability Assessment Regulations which obliges a credit provider to assess a consumer for affordability before entering into a credit agreement with the consumer. The NCA has established the National Credit Regulator as primary enforcer of compliance with the Act. It further established the Tribunal to adjudicate reckless credit complaints. The Tribunal can impose administrative fines on credit providers who were found to have extended reckless credit and it can also cancel their registration as credit providers. Initially only the civil courts could grant the civil relief set out in section 83. However, since the National Credit Amendment Act 9 of 2014 came into operation, the Tribunal can now also grant the very same civil relief as the civil courts in terms of section 83 of the NCA. This dissertation interrogates the power of the Tribunal to grant civil relief and makes recommendations regarding whether this power should be retained.